« The Federal Income Tax -- Then (1913) and Now (2017) | Main | Arlington County Board Makes It Official - Tax Burden to Rise »

Virginia Improves Its Economic Outlook and Performance

The American Legislative Exchange Council (ALEC) published the 10th edition of Rich States, Poor States this week. Subtitled the ALEC-Laffer State Economic Competitiveness Index, it "reveals a pro-growth trend across the nation for 2017." The authors of Rich States, Poor States are Dr. Arthur Laffer, Stephen Moore, and Jonathan Williams.

Here's how ALEC introduces the index:

"Rich States, Poor States examines the latest movements in state economic growth. The data ranks the 2017 economic outlook of states using fifteen equally weighted policy variables, including various tax rates, regulatory burdens and labor policies. The ninth edition examines trends over the last few decades that have helped or hurt states’ economies.

"Used by state lawmakers across America since 2008, Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, is authored by economist Dr. Arthur B. Laffer; Stephen Moore, distinguished visiting fellow at the Heritage Foundation; and Jonathan Williams, vice president of the ALEC Center for State Fiscal Reform."

The state rankings are based on two numbers:

The first is the Economic Outlook Ranking, "a forecast based on a state’s current standing in 15 state policy variables. Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend less—especially on income transfer programs, and states that tax less—particularly on productive activities such as working or investing—experience higher growth rates than states that tax and spend more."

The second is the Economic Performance Ranking, "a backward-looking measure based on a state’s performance on three important variables: State Gross Domestic Product, Absolute Domestic Migration and Non-Farm Payroll Employ- ment—all of which are highly influenced by state policy. This ranking details states’ individual performances over the past 10 years based on this economic data."

Virginia's Economic Outlook ranks 11th (1=best, 50=worst), and it's Economic Performance ranked 23rd. The latter is a combination of state GDP (28th); state domestic migration (22nd); and non-farm payroll (24th). The Economic Outlook is an improvement over 2016 when it ranked 13th, but still has a ways to go since it ranked 8th in 2010.

The economic variables that helped its relatively high Economic Outlook ranking of 11th included whether Virginia levied an estate or inheritance tax; state minimum wage, Virginia's right-to-work status, and its average workers' compensation costs. On the other hand, economic variables dragging down Virginia's Economic Outlook include top marginal corporate income tax rate; property tax burden; recently legislated tax changes; and, number of tax expenditure limits.

The complete 55-page .pdf version of the Index is available here.

HT Clark Packard for bringing the new "Rich States, Poor States" to our attention at the National Taxpayers Union (NTU) blog. His post included:

". . . The study confirms what many know to be true – states that tax and spend less outperform high spending and high taxing states.

"Over the last couple years, for instance, North Carolina has dramatically improved its economic outlook – from 26th in 2011 to 3rd for 2017 – by passing comprehensive tax reform that lowered rates and helped rein in state spending."

ALEC included the following quote about the report by U.S. Senator Tim Scott (R-South Carolina):

"As the national economy continues to remain far below trend, ALEC’s measures of state economic policies and how these policies contribute to state-level economic performance are more important than ever for understanding economic growth and opportunities. This publication provides fundamental knowledge for evaluating the policies that enhance economic growth, and those that lead to economic stagnation. It is a must-read for policymakers and anyone interested in how our states can grow and provide their residents more opportunities to succeed."

Growls readers who are not satisfied with the "state of the Commonwealth" should take a few minutes to review the entire Rich States, Poor States report for Virginia, and then write to Governor McAuliffe. Click-on the following link:

Growls readers who are concerned that Virginia legislators are not making the right economic policy decisions should write to their state legislators. The following legislators represent Arlington County in the Virginia General Assembly: Senators (Adam Ebbin, Barbara Favola, or Janet Howell) and Delegates (Rip Sullivan, Patrick Hope, Alfonso Lopez, or Mark Levine). Contact information for members of the General Assembly can be found here  -- use one of the "quick links" to locate the senator and delegate who represent you.

And tell them ACTA sent you.

TrackBack

TrackBack URL for this entry:
http://www.acta.us/growls-mt/mt-tb.fcgi/3732